Opening Bell: 07.25.13

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Banks Said to Weigh Suspending Dealings With SAC as Charges Loom (Bloomberg)
Deutsche Bank AG and Goldman Sachs Group Inc. are among firms weighing the reputational and financial consequences of continuing to provide trading, lending and prime brokerage services to SAC, one of Wall Street’s largest trading clients, said the people, who asked for anonymity because the talks aren’t public. Prosecutors plan to charge SAC, the hedge fund founded by Steven A. Cohen, as soon as today as part of a probe of insider trading, a person familiar with the matter said. ... The banks face a conundrum, either being seen as abandoning a long-term client or assisting a firm targeted for prosecution. At the same time, the companies are seeking to ensure that loans and trading agreements are properly collateralized in case SAC is forced to close, one of the people said.

Credit Suisse Posts $1 Billion Profit (DealBook)
Credit Suisse, one of Switzerland’s largest banks, said on Thursday that profit in the second quarter rose by a third, thanks to higher earnings at its investment banking operation. Profit rose to 1.04 billion Swiss francs ($1 billion) in the three months ended June 30, from 788 million francs in the period a year earlier. That compares with a forecast of 1.017 billion francs by a group of analysts polled by Thomson Reuters. ... “Our business model is performing well and we continue to make progress in reducing our cost base and balance sheet,” Mr. Dougan said in a statement.

Lazard Profit Beats Estimates on Asset Management, Merger Advice (Bloomberg)
Lazard Ltd., the biggest independent merger-advisory firm, said second-quarter profit rose 81 percent, beating analysts’ estimates as revenue from asset management and merger advice increased. Earnings rose to $60 million, or 45 cents a share, from $33 million, or 25 cents, a year earlier, the Hamilton, Bermuda-based firm said today in a statement. The average estimate of 11 analysts surveyed by Bloomberg was for per-share earnings of 33 cents.

How much is Fed aid to U.S. corporate profits worth? (Reuters)
"People underestimate the extent to which quantitative easing has benefited the S&P," said Robbert van Batenburg, director of market strategy at brokerage Newedge USA LLC in New York. He called the effect akin to "an athlete on steroids." The Fed's effect on corporate earnings is difficult to quantify. Van Batenburg estimates that corporate savings on interest expense after rates fell to historic lows has accounted for about 47 percent of S&P 500 earnings growth since 2009.

Fraternities Lobby for Tax Break Without Hazing Penalties (Bloomberg)
About 40 percent of U.S. senators, and 25 percent of U.S. representatives, belonged to fraternities or sororities in college. On April 24, more than a dozen of these grateful alumni extolled Greek life at an annual $500-a-plate dinner in a Washington hotel ballroom for “FratPAC,” the industry’s political arm.
One by one, they took the podium and praised fraternities for teaching them loyalty, leadership, and practical skills. “We learned to tap a keg,” declared Representative Steven Palazzo, a Mississippi Republican and Sigma Chi brother, who then yelled a cheer as hundreds of FratPAC donors applauded.

Merrill bias suit: Women employees claim they were given book urging them to 'stroke men's egos' to advance (NYP)
Female trainees at Merrill Lynch’s flagship Manhattan office were given copies of “Seducing the Boys Club: Uncensored Tactics From a Woman at the Top” by their boss — who also ordered them to attend a talk with the author, three former employees claim in a bias lawsuit. The author encourages women “to stroke men’s egos with flattery and manipulation in order to succeed in a male-dominated environment such as Merrill Lynch,” the suit states. ... They were also pressured to attend gals-only events on topics like “dressing for success” and “preparing healthy meals while working full-time.”

Bond Investors Turn to Cash (WSJ)
Investors withdrew an estimated $43 billion from taxable bond mutual funds last month, the largest-ever monthly outflow, according to the Investment Company Institute. The debt-market swoon was fueled by worries that the Federal Reserve was softening its commitment to keeping interest rates low. Rising interest rates mean lower bond prices. Many observers expected to see those flows turn to funds tracking U.S. stocks. But in a twist, the main beneficiary of the rush out of bonds has been money-market funds, which are cash-like investments that appeal to safety-minded investors.

Facebook shares leap on mobile ad surge (FT)
Facebook shares leapt as much as 20 per cent in after-hours trading in New York on Wednesday after the social networking company beat analyst expectations on revenues and profits. On a pro forma basis tracked by Wall Street, second quarter net income rose 65 per cent to $488m compared with the same quarter last year on revenues up 53 per cent to $1.81bn, ahead of analysts’ expectations of $1.62bn. Earnings per share of 19 cents exceeded expectations of 14 cents per share. Sheryl Sandberg, chief operating officer, said spending increased across all categories of advertisers. Ecommerce companies, in particular, doubled spending, and the number of local businesses advertising on the site globally also doubled to 1m.

Nasdaq earnings slip on deal costs, while revenues rise (Reuters)
Nasdaq OMX Group reported on Wednesday a lower second-quarter profit, mainly due to acquisition costs related to the closing of two deals by the transatlantic exchange operator. Net income attributable to Nasdaq totaled $88 million, or 52 cents per diluted share, down from $93 million, or 53 cents a diluted share, a year earlier. Nasdaq closed a $390 million deal to buy Thomson Reuters's investor relations, public relations and multimedia services businesses, during the quarter. It also completed a $750 million deal to buy electronic Treasurys-trading platform eSpeed from BGC Partners.

Hong Kong boosts renminbi liquidity to ease credit crunch (FT)
The Hong Kong Monetary Authority has taken fresh steps to improve renminbi liquidity, a month after a credit crunch in China spread to the city’s banking system. Hong Kong’s central bank announced on Thursday it would add two additional renminbi lending facilities to its existing seven-day liquidity tap. As of July 26, the HKMA will offer one-day funds, as well as overnight funds in renminbi.

Rich Move Assets from Banks to Warehouses (Spiegel)
Recently, even Swiss bankers have been sending letters to their clients, asking them to cooperate with tax authorities and consider turning themselves in. This only heightens fears of the tax authorities. "We assume that a total of hundreds of billions of francs will flow out of Switzerland," said the head of the asset management division of UBS, a major Swiss bank, in late 2012. But not everything the banks are losing is actually leaving Switzerland. Customers are admittedly emptying out their accounts and safe deposit boxes. But partly as a result of the many uncertainties in the financial markets, a growing share of the money is being invested in tangible assets, such as art, wine and classic cars. A total of $4 trillion has reportedly been invested in "treasure assets," a category including various kinds of precious objects. This requires warehouse space that satisfies the most stringent security requirements. Swiss military bunkers blasted deep into Alpine rock are in great demand. But the free ports in Geneva and Zurich are even more popular because they offer what Swiss banks used to: the freedoms of a tax haven and maximum discretion.

Sexy Ukrainian thief’s crowdfunding website only raised $175 of $821,000 restitution needed to keep her out of prison (NYDN)
The sexy Ukrainian thief who launched a Kickstarter-style campaign to pay off her $821,000 restitution is getting plenty of attention - but not much money. Renata Shamrakova, 28, who pleaded guilty this March to stealing nearly $1 million from Nicky Hilton's ex-husband, says goodwill messages are flooding in - and the other nasty comments are getting the delete treatment. The raven-haired beauty created the "Restitution for Renata" page on GoFundMe.com because she's terrified of going to prison for one to three years, the Daily News first revealed. Her total take so far: just $175, from three different donors. "I would like to help," a male supporter wrote on Shamrakova's Facebook page Wednesday. "I'm going to spread the word ... In the meantime I wanted to ask you ... Are you single? Because you are very beautiful and I would love to take you out sometime." The note meant a lot to Shamrakova, she told The News.

Skydiver collides with shortstop, knocking him out for the season (AP)
A skydiver parachuting in before a summer league game accidentally kicked shortstop Mattingly Romanin in the face, knocking him to the ground and, it turns out, ending his season. The 20-year-old Mattingly said Wednesday he had a concussion and was trying to take the bizarre mishap in stride. ... Romanin said he tried to duck at the last moment, but it was too late. He was hit near the temple and knocked over. Medical personnel tended to him and he got up after several minutes. Romanin recalled his immediate response: "Wow, really? That just happened?"

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Opening Bell: 03.21.13

ECB Threatens To Cut Off Cypriot Banks (WSJ) The European Central Bank ramped up pressure on Cyprus to seal a bailout agreement with the European Union and the International Monetary Fund by Monday, making further funding for the island's ailing banks contingent on a deal. The ECB said it would extend emergency funding that has kept the island's banks in operation while the bailout plan was being negotiated in recent months only until Monday. "Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an European Union/International Monetary Fund program is in place that would ensure the solvency of the concerned banks," the ECB said in a statement. Italy's Five-Star Party Reiterates Demand for Euro Referendum (WSJ) Representatives of Italy's Five-Star Movement reiterated their anti-establishment party's demands for a referendum on the country's membership of the euro, and insisted that they should form the country's next government. Italian President Giorgio Napolitano is consulting political leaders on forming a government after last month's inconclusive election result. Deustche Bank Legal Bill Mounts (WSJ) Deustche Bank revised fourth-quarter earnings downward, setting aside about €600 million ($773 million) in legal provisions for U.S. mortgage litigation in another sign that mounting legal liabilities are cutting into investment -bank profits. The bank updated its fourth-quarter net loss to 2.54 billion euros, wider than the originally reported loss of €2.17 billion. This compared with a profit of €147 million a year earlier. The bank also reiterated that it would make first-quarter targets for a key measure of the bank's health known as the capital ratio, indicating a strong first quarter, analysts said. Deutsche Bank has now set aside €2.4 billion for litigation, with additional identified non-provisioned legal risks of €1.5 billion. The bank's legal provisions were nearly 10 times net profit of €237 million for 2012, compared with a profit of €4.1 billion in 2011. Total legal risk is likely much higher than what the bank has publicly identified, analysts said. Lululemon Sees Sheerness Issue Hitting Profits (WSJ) Lululemon Athletica said Thursday its fourth-quarter profit climbed 48%, but said it expects the transparency issue related to some of its yoga pants to reduce first-quarter earnings by 11 to 12 cents a share. Bernanke Saying He’s Dispensable Suggests Tenure Ending (Bloomberg) Federal Reserve Chairman Ben S. Bernanke said he’s “spoken to the president a bit” about his future and that he feels no personal responsibility to stay at the helm until the Fed winds down its unprecedented policies to stimulate the economy. “I don’t think that I’m the only person in the world who can manage the exit,” Bernanke said when asked at a news conference in Washington if he’s discussed his plans with President Barack Obama. His term expires at the end of January. Personal assistant pleads guilty to embezzling 821G from hedge funder Todd Meister (NYP) After a year of denials, glamorous Ukranian embezzler Renata Shamrakova admitted in Manhattan Supreme Court yesterday that she stole nearly $1 million while working as the personal assistant to hedge funder Todd Meister. Under the plea deal, she will serve no jail time but must repay what she took within two years. “Yes, your honor,” Shamrakova told the judge, when asked if she had committed grand larceny in the second degree by stealing from Meister, 42, a Harvard-educated money man who famously married Nicky Hilton for just six weeks in 2004. Shamrakova, 28, wore a gray cashmere sweater over a short, floral-print skirt and spoke in a quiet, girlish voice as she sat at the defense table and admitted her crimes. In addition to ripping off Meister, she tried to dodge a search warrant by hiding financial records. Dell Walks Fine Line in Pitch for Buyout (WSJ) Mr. Dell needs to persuade Dell Inc. investors that the prospects for the company he founded in his dorm room in 1984 and has been running for the past six years are anything but rosy if he is to succeed with his plan to take the computer maker private. Friday marks the end of a 45-day window to flush out alternative offers to the $24.4 billion buyout deal that Mr. Dell and private-equity firm Silver Lake Partners reached last month. The $13.65-a-share offer has sparked derision from some shareholders who believe the price undervalues the Round Rock, Texas, company. No alternative bid has been offered, but late Wednesday Blackstone Group LP was working on a few scenarios for a potential bid that would see the private-equity giant team with a partner to buy all or part of the computer maker, according to people familiar with the matter. JPMorgan To Return Money To MF Global Customers (AP) JPMorgan Chase has agreed to a deal that will return $546 million to former customers of trading firm MF Global Holdings Ltd., which collapsed in 2011 with $1.6 billion missing from its accounts. Initial Jobless Claims in U.S. Rise Less Than Forecast (Bloomberg) Applications for jobless benefits increased by 2,000 to 336,000 in the week ended March 16, Labor Department figures showed today. Economists projected 340,000 claims, according to the median estimate in a Bloomberg survey. The monthly average, which smoothes the week-to-week volatility, dropped to the lowest level since February 2008. Regulator finds flaws in Deutsche Bank's Libor supervision (Reuters) German markets watchdog Bafin is set to tell Deutsche Bank of "organizational flaws" in how it supervised its contribution to the setting of inter-bank lending rates at the heart of the international rate-rigging scandal, sources familiar with the watchdog's investigation said. Wis. limits use of nude beach to reduce sex, drugs (AP) Wisconsin authorities announced Tuesday they will shut down one of nation's most popular nude beaches on weekdays after struggling for years to curtail sex and drugs on the sandbar and surrounding woods. Nudists from around the country have been traveling to the public beach on the Wisconsin River near Mazomanie, about 25 miles northwest of Madison, for decades as word spread that prosecutors in ultra-liberal Dane County wouldn't go after anyone for showing skin. But visitors haven't stopped at just stripping down. They've been slipping off into the woods for trysts and drugs. Authorities say that's crossing the line, but they haven't been able to stop the shenanigans. Their frustration reached a tipping point Tuesday, when the state Department of Natural Resources announced it will close the beach, the islands immediately off it and the surrounding woods to the public on weekdays, when wardens say troublemakers tend to operate unseen. The closures begin immediately. The area will remain open on weekends, though. Bob Morton, executive director of the Austin, Tex.-based Naturist Action Committee, which lobbies on behalf of nudists, has visited the beach several times. He criticized the DNR for not consulting with beachgoers before closing the area. "Honestly, we're on their side when it comes to enforcing things that are lewd and lascivious," Morton said. "There's something to be said about consulting the users of the place. There's got to be more to this somewhere."

Opening Bell: 10.17.12

BofA Sees Profit Slump (WSJ) Bank of America reported a profit $340 million versus a profit of $6.23 billion a year earlier. On a per-share basis, which includes the payment of preferred dividends, the bank reported a profit of less than a penny versus 56 cents a year earlier. The year-earlier period included 27 cents a share in net gains from one-time. Revenue fell 28% to $20.43 billion. Analysts polled by Thomson Reuters expected a per-share loss of seven cents on revenue of $21.89 billion. BNY Mellon Profit Increases as Rising Stocks Boost Assets (Bloomberg) Net income increased to $720 million, or 61 cents a share, from $651 million, or 53 cents, a year earlier, the New York- based bank said today in a statement. Analysts had expected the New York-based company to report a profit of 54 cents a share, according to the average of 16 estimates in a Bloomberg survey. Citi's Pandit Quits Amid Board Clash (WSJ) The shake-up amounts to an extraordinary flexing of boardroom muscle at Citigroup, a company that until recently had a board stocked with directors handpicked by former CEO Sanford Weill who rarely challenged management decisions. The action raises questions about whether the sprawling Citigroup empire ultimately will be dramatically pared back or broken up, something Mr. Pandit opposed. When it was formed in 1998, Citigroup was envisaged as the prototype of the modern bank, a "financial supermarket" with tentacles in all areas of lending, securities and deposits. Its creation helped spark the end of the Depression-era Glass Steagall Act separating securities and banking. Citigroup's New CEO Has A Lot To Tackle (Fortune) Corbat is a Connecticut native. He is listed as the owner of a 4-bedroom, 1-and-a-half-bath, 3,500 square foot Manhattan apartment on Central Park West. The apartment has a fireplace and exposed wood beams in the living room. But Corbat doesn't appear to live there. According to the real estate website Streeteasy, the apartment was rented out in March for $33,000 a month. Corbat also owns a house in 6,300 square foot house in Wilson, Wyoming. That house was estimated to be worth $3.7 million in 2010, according to real estate website Trulia. Pay seems to be part of the reason for Pandit's department. Earlier this year, shareholders voted to reject a $15 million pay package for the Citi's former CEO. Corbat said he will take $1.5 million as a base salary, plus a bonus to be determined later. RBS Exits Government Insurance Plan (WSJ) RBS said it has struck a deal with the U.K. Treasury to exit the government's Asset Protection Scheme, effective Thursday, the earliest date possible under the terms of the contract. The program was crafted at the height of the financial crisis in an effort to shield banks by insuring their assets after the lenders absorbed an initial loss. The insurance program is now considered largely unnecessary because many of RBS's insured assets have been sold or written off. The bank, which is 81% government-owned, will have paid £2.5 billion ($4.03 billion) in fees for its participation in the APS without having made a claim, in addition to about £1.5 billion paid to the Treasury for support received during the financial crisis. Passenger Jet In Low Altitude Search (Australian) An Air Canada jet descended from 38,000ft to as low as 3700ft (1128m) to allow passengers to look for a yacht missing off the NSW coast. The Boeing 777 flying from Vancouver to Sydney joined an Air New Zealand Airbus A320 in the initial search for the damaged boat. Captain Andrew Robertson said the airline was approaching top of descent and talking to air traffic control in Brisbane at 8.18am when it was asked to assist in the search. The flight crew programmed the coordinates ofthe stricken yacht into the aircraft's flight computer and determined it was about 160 nautical miles (296km) further out from the coast than the 777 but that the aircraft was enough fuel to reach the location.. "We were at 38,000ft and we just kept going down," said Captain Andrew Robertson. "I knew we would have to get really low and we got down to 5000ft above the water as we approached the area. "I had already made a PA announcement telling passengers what we were doing and as we got into the area, I said: "We're coming into the search area, please everybody look out to the window and if you seen anything let us know. Norway’s Housing Boom Could Lead to Spain-Style Bust, Say Some (CNBC) Norway’s housing sector, which has seen prices jump by almost 30 percent since 2006 — could end up replicating a pattern of housing booms and busts seen across the globe, from the U.S. to Japan to Spain and Ireland, according to a report by Bank of New York Mellon. Indeed, Norway's house price rise has been so dramatic that the Federal Reserve Bank of San Francisco wrote a paper on the subject in June that made parallels between the lead up to the U.S. housing crisis and the “irrationally exuberant bubble” of Norway’s present boom. BlackRock Profit Rises 7.9% on as Assets Rise on ETFs (Bloomberg) Net income climbed 7.9 percent to $642 million, or $3.65 a share, from $595 million, or $3.23, a year earlier, the New York-based company said today in a statement. Excluding certain one-time items, profit of $3.47 per share exceeded the $3.32-a- share average estimate of 19 analysts surveyed by Bloomberg. Knight Capital Posts Third-Quarter Loss Due To Fallout Over Software Glitch (AP) The company company reported a loss attributable to common shareholders of $764.3 million, or $6.30 per share, for the period ended Sept. 30. That compares with net income of $26.9 million, or 29 cents per share, a year ago. Knight Capital said Wednesday that the loss from the software glitch was more than $400 million. Excluding $2.46 per share related to the software glitch and other items, earnings came to a penny per share. Analysts forecast 2 cents per share, according to a FactSet survey. Police: Alanis Morissette Music Leads To Domestic Violence (N4J) A 24-year-old Jacksonville man who didn't like his boyfriend's taste in music let him know about it by hitting him in the face with a plate, according to the Jacksonville Sheriff's Office. Police said 33-year-old Todd Fletcher has a large cut on the side of his face to prove it. Allen Casey was arrested Sunday after police said he acted on his displeasure that Fletcher was listening to Alanis Morissette. "That's all that (expletive) listens to," Casey said, according to a police report.

Opening Bell: 07.18.12

BofA Swings To Profit, Topping Analysts' Estimates (WSJ) Bank of America reported a profit of $2.46 billion, compared with a year-earlier loss of $8.83 billion. On a per-share basis, which reflect the payment of preferred dividends, earnings came in at 19 cents from a loss of 90 cents a year earlier. The year-ago quarter's results included a charge of $1.23 a share in mortgage-related and other adjustments. Total revenue surged 66% to $21.97 billion. Analysts polled by Thomson Reuters expected earnings of 14 cents a share on $22.87 billion in revenue. The bank's profit was helped by reduced provisions for loan losses as credit quality continued to improve. Credit-loss provisions totaled $1.77 billion compared with $3.26 billion a year ago and $2.42 billion in the first quarter. HSBC Probe Brings Promises Regulator, Bank Will Clean Up Act (Bloomberg) HSBC executives apologized for opening their U.S. affiliate to a river of Mexican drug lords’ cash, and the U.S. regulator that failed to stem the flow vowed to prevent a repeat. “I deeply regret we did not act sooner and more decisively,” Comptroller of the Currency Thomas Curry said at a day-long hearing yesterday of the Senate Permanent Subcommittee on Investigations. He said his agency, which regulates HSBC’s U.S. arm, is partially responsible for letting Europe’s largest bank give terrorists, drug cartels and criminals access to the U.S. financial system and will take “a much more aggressive posture.” Opinion: Investing In America Produces The Best Returns, By Lloyd Blankfein (Politico) The question I’m most often asked these days is, “Where should I invest?” In recent years, we all know, there has been an unusually high degree of uncertainty. It falls into two broad categories: cyclical concerns that focus on the outlook for near-term economic growth and structural concerns that center on the viability of existing political or economic systems — for example, the European Union. The cyclical and structural challenges are considerable, and in some cases, even daunting. But when I meet with chief executive officers and institutional investors and they ask me where to invest, my response is that the United States remains as attractive as ever. And it would be even more attractive if it can make some short-term progress in a few key areas. Hugh Hendry: ‘Bad Things are Going to Happen’ (FT) Hendry believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.” For Yahoo CEO, Two New Roles (WSJ) Just hours after Yahoo named Marissa Mayer as its new chief, the real conversation kicked in: how she will juggle pregnancy and being the CEO charged with saving a foundering Internet giant. The 37 year-old former Google executive is expecting her first child, a son, in early October. On Tuesday, she started her new job at Yahoo, which reported another quarter of lackluster sales growth...No Yahoo directors expressed concern about her pregnancy, according to Ms. Mayer, who told the board in late June, about a week after Yahoo's recruiter contacted her. She says she plans to work during her maternity leave, which will last several weeks...Ms. Mayer's husband, Zachary Bogue, a former attorney, is co-managing partner at Data Collective, an early-stage venture capital fund specializing in tech start-ups. JFK jet in laser scare (NYP) A lunatic aimed a powerful laser beam at an airliner flying over Long Island on its way into JFK — sending the pilot to the hospital and endangering the lives of the 84 people aboard. The first officer on JetBlue Flight 657 from Syracuse was treated for injuries to both eyes after the blinding flash of light lit up the cockpit Sunday night — as the FBI and Suffolk cops hunted for the person responsible, who could face federal prison time. The Embraer E190 jet landed safely, and the injured pilot — identified by sources as First Officer Robert Pemberton, 52 — was met at the gate and taken to Jamaica Hospital. Authorities believe the beam came from around West Islip, Babylon or Lindenhurst. “You wouldn’t think a pen laser would go that far of a distance,” said shocked West Babylon resident Cindy Konik, 50...A startled co-pilot, who was not identified, immediately took over the controls from his temporarily blinded colleague. “We just got lasered up here — two green flashes into the cockpit,” the captain radioed controllers at Ronkonkoma. Credit Suisse Sets Capital Plan (WSJ) moved Wednesday to stanch recent concerns about its financial strength, saying it is raising capital through the sale of convertible bonds, more divestments and the launch of another cost-savings program. It is a surprise twist in a spat with the country's central bank, which recently warned that Switzerland's number two bank wasn't strong enough to withstand a major crisis. Credit Suisse initially rejected the central bank's criticism, saying it was among the world's best-capitalized banks. This didn't impress investors, who offloaded their shares, wiping out 2 billion Swiss francs ($2.05 billion) in market value. At one point last month the bank even felt compelled to reassure investors that it was profitable in the second quarter, even though profitability over the period was never in doubt. Strong Possibility Of Further Fed Easing By September: Goldman (CNBC) In a testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke offered no new hints that the central bank is planning more easing, but repeated a pledge that the Fed “is prepared to take further action as appropriate to promote stronger economic recovery.” “While we think that a modest easing step is a strong possibility at the August or September meeting, we suspect that a large move is more likely to come after the election or in early 2013, barring rapid further deterioration in the already-cautious near term Fed economic outlook,” Goldman Sachs conomist Andrew Tilton said in a report. BlackRock's Net Slips 11% (WSJ) BlackRock reported a profit of $554 million, or $3.08 a share, compared with a year-earlier profit of $619 million, or $3.21 a share. Stripping out one-time items, per-share earnings rose to $3.10 from $3. Revenue slipped 5% to $2.23 billion. Analysts expected earnings of $3.01 a share on $2.26 billion in revenue, according to a poll conducted by Thomson Reuters. BNY Mellon profit falls 37 percent on litigation charge (Reuters) Bank of New York Mellon Corp said on Wednesday that second-quarter net income had fallen 37 percent on lower foreign exchange revenue and after it paid $212 million to settle an investor lawsuit. The world's largest custody bank reported net income of $466 million, or 39 cents a share, compared with $735 million, or 59 cents a share, a year earlier. As announced earlier this month, the results included an after-tax charge of $212 million to settle an investor lawsuit accusing the bank of imprudently investing their cash in a risky debt vehicle that collapsed in 2008. Quarterly revenue fell to $3.62 billion from $3.85 billion. Residents warned: 6-foot lizard loose in Colorado (AP) A sheriff has warned residents in a tourist town northwest of Colorado Springs that a strong, aggressive 6-foot lizard that eats small animals — including dogs and cats — is on the loose in the area. Teller County Sheriff Mike Ensinger said Tuesday that a 25-pound pet Nile monitor lizard has gone missing after breaking a mesh leash and crawling away. Ensinger said about 400 homes in the Woodland Park area were warned. He added that the animal, which escaped Monday and is known as Dino, has not bitten any humans — yet. "We have a 6-foot reptile out and about," Ensinger said. "If it gets hungry enough, we don't know what it will do." Ensinger said officers may use a tracking dog if Dino isn't located by Tuesday afternoon. "I'm not going after it," Ensinger said. "I don't do reptiles."

Opening Bell: 04.19.12

Morgan Stanley Beats Estimates as Trading Gain Tops Peers (Bloomberg) The net loss of $94 million, or 6 cents a share, compared with profit of $968 million, or 50 cents, a year earlier, the New York-based company said today in a statement. Excluding accounting charges tied to the firm’s own credit spreads, profit was 71 cents a share, topping the 44-cent average estimate of 17 analysts surveyed by Bloomberg. Fixed-income trading revenue surged 34 percent, surpassing the 19 percent gain at Citigroup Inc. and Goldman Sachs Group Inc.’s drop of more than 15 percent, excluding accounting adjustments. Morgan Stanley Chief Executive Officer James Gorman, 53, has set a goal of 15 percent return on equity after lingering pressures from the financial crisis held that measure below 10 percent for five straight years. First-quarter return on equity was 9.2 percent. BofA Profit Falls But Beats Estimates (WSJ) The bank reported a profit of $653 million, compared with a year-earlier profit of $2.05 billion. Per-share earnings, which reflect the payment of preferred dividends, fell to three cents from 17 cents a year ago. The latest quarter included, among other items, a $4.8 billion pretax hit tied to changes in the value of the bank's debt. Excluding accounting changes related to the bank's debt, BofA reported profits of 31 cents per share, compared with the 12 cents estimated by analysts polled by Thomson Reuters. Blackstone First-Quarter Profit Falls on Performance Fees (Bloomberg) Economic net income, a measure of earnings excluding some costs tied to the firm’s 2007 initial public offering, dropped to $432.3 million, or 39 cents a share, from $571 million, or 51 cents, a year earlier, New York-based Blackstone said today in a statement. Analysts had expected earnings of 40 cents a share, according to the average of nine estimates in a Bloomberg survey. Fitch Analyst Reportedly Warns on Dutch Rating (Reuters) "The Dutch are on the edge of a negative rating action," the Telegraph quoted Fitch analyst Chris Pryce, the rating agency's expert on the Netherlands, as saying. Ackman Plans 2013 listing for $4bn fund (FT) Pershing Square is planning a $4bn public flotation for a new fund in January 2013. Bill Ackman intends to float the vehicle, which has already been set up in Guernsey and is known as Pershing Square Holdings, on a "major exchange." PSH will be a shell company and invest all its assets in Pershing Square’s offshore hedge funds. As such, after flotation, it would offer Mr Ackman a source of permanent capital. Man accuses Blackhawks, Cubs of 'stealing his ideas' (Chicago Tribune) Emanuel Kuvakos, 56, was arrested Tuesday night and charged with three counts of misdemeanor harassment by electronic means, police said. Kuvakos sent “a number’’ of emails to Blackhawks CEO John McDonough and to Jim Hendry, the former general manager of the Chicago Cubs, that accused them of “stealing his ideas to win championships,’’ according to a police report. On Saturday, he sent them another email stating that he would keep the Blackhawks from winning the Stanley Cup, police said. While being interviewed by authorities, he claimed he also sent a message to Rocky Wirtz, the Blackhawks owner, saying that if he ever saw Wirtz, he would beat him, according to the police report. Kuvakos, whose nickname is “Mike,” said during a telephone interview with the Chicago Tribune that he has been a freelance sportswriter for 30 years, and claimed he is a sports psychologist and “savant” who works for the Blackhawks, White Sox and the Cubs. Talks With Instagram Suggest a $104 Billion Valuation for Facebook (Dealbook) Facebook bought the photo-sharing service for $1 billion in early April, agreeing to pay roughly 30 percent in cash and 70 percent in stock, according to people briefed on the negotiations who did not want to be identified because the discussions were private. At that level, Facebook is pegging its own stock price at roughly $30 a share. Based on those numbers, the giant social network is valued at north of $75 billion. But Facebook could actually be worth more. During the negotiations with Instagram, the parties framed the deal around a logical assumption: Facebook could soon trade publicly at a much higher market value. As part of the talks, the companies discussed a potential value of about $104 billion for Facebook, these people said. One of Instagram’s founders, Kevin Systrom, first broached the number, one of the people said. At $104 billion, the value is roughly in line with where Facebook has at times traded on the secondary market: shares of the privately held company have been selling for as high as $40. More Americans Than Forecast Filed Weekly Jobless Claims (Bloomberg) Jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000. KKR's Real-Estate Arm Makes Its First Investment (WSJ) The Yorktown Center mall has 1.5 million square feet of retail space and more than 150 stores including a J.C. Penney and a Victoria's Secret. KKR's co-investor in the deal is YTC Pacific, which will manage the property, these people said. As is typical in a private-equity real-estate investment, KKR plans to improve the look of the mall and increase the occupancy rate with an eye toward reselling the property. Facebook Photo Sinks Man Who Stole Police Gas (TSG) A Kentucky man is facing a misdemeanor rap after he siphoned gasoline from a police car, a theft that came to the attention of cops after the perp posted a Facebook photo memorializing the crime. As Michael Baker, 20, was swiping the gas last month from a Jenkins Police Department squad car, he made sure to flip the bird as his girlfriend snapped a picture. While the siphoning photo has been removed from his Facebook page, Baker yesterday updated his 380 friends on his legal problems. “just got out of jail,” he wrote in one post, adding later that “yea lol i went too jail over facebook.” Responding to a friend who had not seen the image before it was yanked, Baker assured, “yea lol u would just have to seen it it was funny as hell tho.”